A tweet highlighting this solar farm showed up in my feed and it got me thinking about what kind of revenue a piece of land can generate as a solar farm compared to a dairy farm.
It’s my understanding that this is a 6.5MW solar farm on land that used to host a dairy farm.
Is Milk Dying?
Milk consumption has been steadily declining in the US, but overall dairy product consumption has still been increasing due to increases in consumption of dairy products (butter, cheese, etc.) so this doesn’t appear to be a case of lower demand for milk forcing dairy farmers out of the business. And milk prices appear to be strong.
Since milk doesn’t appear to be dying, let’s look at what that land is capable of producing from a dairy vs electricity perspective. Here’s what I found with some light Googling.
If any of the assumptions in that need some tweaking, let me know.
Here’s what I think this is saying: it’s not surprising that dairy farmers receive offers for their land from solar farmers. The land is valuable for both but appears to be able to generate higher revenues by farming electricity from the sun over milk from the sun.
There are hybrid models as well. Here’s an example:
That makes sense. Having a portion of land devoted to guaranteed revenue may help weather fluctuations in dairy prices. That guaranteed revenue could come in the form of revenue from solar generation or leasing the land to a solar farmer.
Will we have enough milk? Cheese? Yogurt? No worries. Cows are working harder than ever to keep us dairied.
Will this trend continue? Yes. Why? This:
Demand remains steady. Demand might actually increase as people shift to electric cars, cooking, and water heating with heat pumps over gas. Prices remain steady. But the cost to generate electricity using solar continues to decrease. That is good news for people interested in selling land to solar farmers.